SINGAPORE: Oil edged up in Asian trade on Tuesday as the European single currency recovered, spurring investor demand for crude futures, analysts said.
New York's main futures contract, light sweet crude for delivery in July gained nine cents to 71.53 dollars a barrel while Brent North Sea crude for delivery in July was up three cents to 72.15 dollars. "The euro has been getting stronger against the US dollar and stock markets in Asia have steadied this morning," said Ken Hasegawa, an energy desk manager with the Newedge brokerage in Tokyo.
"These factors pushed the crude oil price higher," he told AFP. Pressure on the euro eased against major currencies on Tuesday but the unit remained depressed a day after plunging to a four-year low on deepening fears over Europe's debt woes, dealers said.
The euro changed hands at 1.1960 dollars in Tokyo morning trade, up from 1.1919 in New York on Monday. Against the yen, it fetched 109.32 against 109.00 in New York. A weaker US currency tends to improve demand for dollar-priced crude oil, which becomes more attractive to buyers using stronger currencies. In turn, that pushes prices higher.
Stock markets in Asia were also higher with the benchmark Hong Kong Hang Seng Index up 0.42 percent in the first minutes of trade while Tokyo rose 0.37 percent by the afternoon. Hasegawa said news that a natural gas facility exploded on Monday in the US state of Texas was also helping to support oil prices, although concerns over the eurozone economy continues to dominate investor sentiment.
"From a fundamental point of view, we have the news that a natural gas pipeline in Texas has exploded... but the market has been very influenced by the euro's movement lately," he said.
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